The NDR nature of the ‘new dawn’

Anthea Jeffery | Jul 18, 2019
If the National Democratic Revolution is to be defeated, South Africa’s moderate majority must stand together in resisting its interventions.

Business is becoming impatient with President Cyril Ramaphosa, as Martin Kingston, executive chairman of Rothschild & Co’s South African unit, said last week. They want the president to step up to the plate and start speedily implementing his ‘new dawn’ reforms.

The president’s policy changes are, however, already well in train. This has simply not been widely recognised because the shifts being made do not fit the ‘new-dawn’ hype that ‘CR’ would soon act to speed up growth and bring down public spending.

Instead, the CR government is pushing ahead with various policies vital to the National Democratic Revolution (NDR). The parliamentary process to amend the Constitution to allow expropriation without compensation (EWC) needs to be resuscitated, says agriculture and land reform minister Thoko Didiza. The housing department will be ‘the first takers in the queue’ for land expropriated without compensation, ‘starting with state-owned land’ in the DA-run City of Cape Town, adds Lindiwe Sisulu, minister of human settlements, water and sanitation,.

The National Health Insurance (NHI) Bill has been approved by Cabinet and is soon to be put before Parliament, even though the resources needed to implement it are not available. Health minister Zweli Mkhize has reportedly brushed this problem aside on the basis that the government ‘does not care’ about the costs or feasibility of the NHI. This makes sense from an NDR perspective, for the real purpose of the NHI is not to improve provision, but rather to give the state comprehensive control over healthcare. 

In addition, the Employment Equity Amendment Bill of 2018 is being given ‘priority’, so that employment and labour minister Thulas Nxesi can start imposing racial targets on businesses in different sectors. The government is also ‘forging ahead with plans to establish a state-owned bank’, says finance minister Tito Mboweni. Prescribed-asset requirements for pension funds are needed too, suggests trade and industry minister Ebrahim Patel, so as to contribute to ‘the development of South Africa through investment in real assets’.

On the BEE front, adds Mr Patel, key sections of the Competition Amendment Act of 2018 are now in force and will be used to ‘address the high levels of market concentration’ that allegedly keep BEE firms out of many markets. In time, dominant companies in these supposedly over-concentrated markets may be forced to divest themselves of some of their assets or equity, as the Act provides. This will help bring about what the minister describes as the ‘fourth’ phase of BEE, in which the focus will fall on building up black businesses.

The common denominator in almost all these changes is a steady erosion of property rights at the hands of the state. Once the EWC constitutional amendment and the Expropriation Bill are in place, moreover, these laws will make it possible for a host of regulatory expropriations to proceed without any compensation having to be paid.

Private hospitals, for example, will be placed under extensive price and other controls under the NHI scheme. Pension funds will be forced to invest in failing SOEs under prescribed asset rules. Big banks may be forced to sell off important assets to BEE competitors at knock-down prices under the new competition legislation.

No direct expropriation will take place in any of these instances, as the state itself will not acquire ownership of the hospitals, pension funds, or banks in issue. Instead, the state’s regulations will deprive existing owners of many of the normal powers and benefits of ownership. Under the new EWC rules, however, no compensation will be payable for the losses that result.

The damage from EWC is thus likely to spread far more widely than is commonly anticipated. As the ANC accurately noted back in 2002, ‘property relations’ matter enormously because they stand ‘at the core of all social systems’. This is also why the ANC is intent on ‘eliminating’ existing property relations as it pushes ahead with the NDR.

Property rights are vital to political rights too. Why this is so was summed up by economist Friedrich Hayek in his bestselling (1944) book The Road to Serfdom, in which he warned against the superficial attractions of socialism. Wrote Hayek:

The system of private property is the most important guarantee of freedom, not only for those who own property, but...also for those who do not. It is only because the control of the means of production is divided among many people acting independently that nobody has complete power over us... If all the means of production were vested in a single hand, whether that of a government representing “society” or that of a dictator, whoever exercises this complete control has complete power over us.’

The more the ANC/SACP alliance has ‘complete control’ over land, healthcare, pension funds, banks, and other large enterprises in markets deemed overly concentrated, the more its ‘complete power over us’ will expand.

Experience in Zimbabwe and Venezuela shows how much is at stake. Both countries have undergone not only extraordinary economic trauma, but also the rape of their democratic systems. Since the ruling parties in both countries began nationalising land, they have also used intimidation and violence against opposition parties, peaceful protesters, and the independent press. In addition, both have ‘stolen’ key elections, so defeating the attempts of their increasingly desperate populations to vote them out of power.

The future into which CR is in fact propelling the country poses an enormous threat to political and economic freedom in South Africa. If the NDR is to be defeated, the moderate majority needs to recognise what is at stake and to stand together in resisting its interventions.

This makes it all the more encouraging that most ordinary South Africans want whites and blacks to work together in building a common prosperity. They also have little interest in sweeping land seizures or radical economic redistribution. Instead, their key needs – right across the racial spectrum – are for jobs, growth, sound education, and effective action against corruption and crime.

Unfortunately, however, the ANC/SACP alliance is well aware of the risks to the NDR in the moderate majority’s coming together in this way. That is why it keeps fostering racial divisions, insists on maintaining the race classifications the National Party government abolished close on 30 years ago, and rejects proposed empowerment policies that would help the truly disadvantaged, rather than enriching a relative elite. That is also why it keeps asserting that racism is at the core of the problems confronting the country, when of course it is the NDR that poses by far the greatest threat.


Dr Anthea Jeffery, Head of Policy Research at the IRR, is the author of People’s War: New Light on the Struggle for South Africa, now available in all good bookshops and as an e-book in abridged and updated form.

 

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